Jointly owned property by a married couple

We accountants are often faced by situations where a rental property is owned jointly by a married couple. Usually the husband is in the higher tax band and wife in basic rate band.

In such cases, HMRC assumes that each of them is entitled to equal share of the income and tax is computed accordingly.

Clients enquire if there is any tax planning that could be done to lower the tax bill.

The simplest solution is to transfer a part of the property to the husband/wife in a lower tax band. Main hurdle is SDLT and lawyer fee. HMRC has a fantastic guidance on SDLT issue. Click here

Every situation is different and in some cases this course should be seriously thought about but usually my advice is not to let the tail wag the dog.

 

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